Petronas buys stake in Canadian gas fields

Petronas and Progress Energy Resources will form a joint venture to explore exporting the fuel.


NEW YORK: Petronas Nasional Bhd, Malaysia's state-owned oil company, agreed to pay as much as C$1.07 billion (RM3.35 billion) for a stake in Progress Energy Resources Corp's British Columbia natural gas fields.

The companies will also form a joint venture to explore exporting the fuel.

Petronas will pay C$267.5 million (RM839.95 million) for a 50 per cent share in the Altares, Lily and Kahta fields in the Montney Shale region, Calgary-based Progress said in a statement yesterday..

The Malaysian company also will fund 75 per cent of development costs for the fields during the next five years, up to C$802.5 million (RM2.5 billion).

Petronas will own 80 per cent of a joint venture that will study the feasibility of building a terminal in British Columbia to export gas by tanker, Progress said.

Shipping the fuel by tanker would allow exports to Asia and other markets not accessible by Canadian pipelines.

Apache Corp, the Houston-based owner of gas fields in the province's Horn River basin, has proposed a similar terminal near Kitimat, British Columbia.

"This is a breakthrough for Progress," chief executive officer Michael R. Culbert said in the statement.

"Canada is poised to take a larger role on the world's energy stage. Developing export options for Canadian natural-gas producers is a logical step."

The Montney Shale, which lies beneath British Columbia and Alberta, holds an estimated 49 trillion cu ft of gas, according to an April 5 report by the US Energy Information Administration.

Producers inject water, sand and chemicals into shale, a dense rock formation, to extract gas. - Bloomberg